Other summaries of these FAST Act provisions are here and here.
New subsection 4(a)(7) of the Securities Act exempts from registration resales of securities if (a) the buyer is accredited, (b) the seller doesn’t engage in general solicitation, and (c) for non-public companies, buyer and seller get specified information from the issuer. The exemption is not available for some, including if the seller is a subsidiary of the issuer or a “bad actor.” (Again, check out the amended text here).The FAST Act also amends Section 18 of the Securities Act to define securities sold under the exemption as “covered securities” not subject to state regulation.
The new safe-harbor requirements in 4(d) are somewhat restrictive in that they allow sales only to accredited investors, require delivery to sellers and buyers of issuer financial statements that may not be readily available, and block sales by some sellers and sales of some types of issuer’s stock. Sellers might have preferred no safe harbor, since it describes circumstances that everyone already knew qualified for the exemption and because courts may pull the contours of the exemption toward what has now been established as safe. (To its partial credit, Congress recognized this possibility in its awkwardly-phrased addition of subsection 4(e), which tells us that “subsection (a)(7) shall not be the exclusive means for establishing an exemption from the registration requirements of section 5.”)
Summaries of ISS and Glass Lewis actions are here, here, here, here, here and here.
Recall that proxy advisers offer the opportunity to verify data and update peer groups, including:
If your board cares about ISS and Glass Lewis ratings, it’s worth taking time to verify the data they use.